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Mutual
funds: investing made simple, convenient and affordable
You have many choices
facing you as a potential investor, and thousands of different products
competing for your attention. Making financial decisions can be intimidating,
and sometimes even frustrating.
Millions of investors
have found that mutual funds are an ideal way to cut through all the confusion
and start investing for the distant - or not so distant - future. Mutual
funds offer you convenient and affordable access to a variety of investments
like stocks, bonds and money market securities, with these other important
benefits:
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Greater
Buying Power
You
can afford even the highest priced securities, because your investment
dollars are pooled with those of other investors who share the same
goals.
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Diversification
for Reduced Risk
Your
investment is spread across literally dozens of securities, so your
financial future doesn't depend on the success of any one stock
or bond issue.
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Professional
Management
A
seasoned portfolio manager oversees your investment on a daily basis.
Easy access to your money. You can buy, sell or redeem shares on
any business day.
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Choice
With
more than 10,000 mutual funds on the market today - including everything
from small cap to large cap funds, and high-yield funds to low turnover
funds – you can be sure that no matter what you hope to achieve
by investing, there's a mutual fund designed to help you pursue
that goal.
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Liquidity
You can buy,
sell or redeem shares on any business day at their then-current
value (which may be more or less than their original cost).
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Convenience
Most mutual
fund programs offer convenient features like automatic dividend
reinvestment and systematic investing.
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Performance
Reporting
As
a mutual fund shareholder, you can easily track the performance
of your mutual fund investment. You'll receive detailed monthly
or quarterly statements containing a complete, up-to-date performance
history of your investment.
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Investor
Protection
The mutual fund
industry is highly regulated, with governing bodies like the SEC
(Securities and Exchange Commission) in place to ensure that mutual
fund investors are protected from false or misleading advertising
and unfair business practices.
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Economies
of Scale
Because mutual
funds trade securities in such large quantities, their trading
costs are likely to be significantly less than what you'd have
to pay as a single investor.
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Factors
to consider before you invest
To get started, all
you really need to do is consider these simple questions:
1. What
do you hope to achieve by investing?
If you're investing with the goal of building a vacation home in 20
years, your investment strategy will be very different from someone
who's investing to help meet current living expenses. To learn more
about investing for a specific goal, go to the Major
Purchase Planning Calculator.
2. How
much investment risk are you comfortable with?
Mutual funds that seek higher investment returns are characterized by
a higher level of risk, while lower risk investments tend to generate
lower returns. To learn more about mutual funds, go to our Resource
Library.
3. How
much time do you have?
Generally,
the longer you have until you need your investment dollars, the better
position you're in to accept risk. To discover your own risk tolerance,
go to our Asset Allocation
Calculator.
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